How much worse could Iran war make the cost of living crisis? – The Latest

Summary

---

Podcast Summary: Today in Focus – The Latest

Episode: Will Iran war make the UK cost of living crisis worse?
Host: Lucy Hoff
Guest: Rupert Jones (Deputy Editor, Guardian Money)
Date: March 11, 2026
Length: ~10 minutes

---

Episode Overview

In this urgent episode of Today in Focus – The Latest, host Lucy Hoff is joined by Rupert Jones to examine the early economic fallout from the ongoing Iran war and its implications for the UK's cost of living crisis. Drawing comparisons with the shocks post-Russian invasion of Ukraine, the episode explores how rising oil prices, energy insecurity, mortgage market volatility, and inflation converge to threaten UK households. With clear explanations and practical advice, Rupert details what consumers might expect in the coming weeks and months.

---

Key Discussion Points & Insights

1. Parallels With Previous Global Shocks

• Echoes of the Ukraine War:
  • Lucy notes that the current economic shockwaves resemble those following Russia’s full-scale invasion of Ukraine, both causing widespread, immediate effects on consumers ([01:04]).
• Early Signs of Impact:
  • The episode frames current events as another potential cost of living crisis, already visible in rising prices at petrol stations and looming energy bill hikes.

---

2. Energy Prices and Household Bills

• Energy Price Cap Timeline:
  • Rupert explains:
    “There's this Ofgem price cap ... that caps off the maximum of what you pay. They've set it for the period 1st of April to the end of June. So we've got ... that's nailed down, if you like.” ([01:55])
  • This cap provides security for the next few weeks, but with market turbulence, analysts are warning the cap may increase by about 10% for July–September ([02:30]).
• Seasonal Uncertainty:
  • Rupert suggests any summer rise may be tempered by reduced usage—but anxiety will return ahead of winter:
    “If you were trying to find some ... silver linings ... the summer is not the worst time [for bill increases]; we do use less energy.” ([02:45])

---

3. Petrol and Diesel Price Surges

• Immediate Cost Increases:
  • Lucy remarks that consumers filling up have “already really [felt]” the difference ([03:23]).
• Breakdown of Increases:
  • Rupert outlines specific jumps:
    • Unleaded petrol: up from 132p to around 140p per litre
    • Diesel: up from 142p to about 155p per litre ([03:41])
  • Adds:
    "If oil stayed above this crucial $100 a barrel figure that everyone always talks about, petrol could rise towards 150p a litre, diesel ... 180p.”
    However, “right now ... oil is sitting at roughly about $90 a barrel. But yeah, they've certainly already gone up, basically.” ([04:15-04:50])
• Practical Tip:
  • “This is the time ... people need to be checking [petrol price comparison apps]. ... now you’ve really got to be sort of checking those things out, really.” ([05:20])

---

4. Strategic Infrastructure Risks

• Strait of Hormuz Blockade:
  • Lucy raises the global choke point:
    “There is a major blockade of the Strait of Hormuz ... through which one fifth of the world’s oil travels. That chokehold is causing this impact ... given the way oil underpins so much of the global economy.” ([04:50])

---

5. Mortgage Market Volatility

• Interest Rates and Product Withdrawals:
  • Lucy highlights anticipated Bank of England cuts amid turmoil, but instead, "hundreds of mortgage products [are] being pulled from the market and interest rates already increasing for people who might be applying." ([05:46])
• Rupert's Analysis:
  • Mortgage rates on a two-year fix are now above 5%—the highest since August.
  • “Nearly 500 mortgage deals ... pulled from the shelves in the last 48 hours. That isn’t as bad as ... after the notorious mini-budget of 2022 ... but ... deals are being withdrawn ... repriced.” ([06:16])
  • Advice:
    “Book a deal if your time is coming up ... You can book something in advance, put your sort of marker down ... and then ... see what happens.”
    Notably, “about 1.8 million people ... their fixed rate mortgage is basically ending this year.” ([07:18])

---

6. Broader Inflationary Pressure

• Food and Essential Goods:
  • Rupert warns:
    “We’ve just had a warning that the main inflation that UK consumers see ... that could end the year higher than previously expected at roughly 3% because of the war, which is all rather unfortunate.” ([08:13])
  • The government had hoped headline inflation would dip close to 2% in 2026 but rising oil/energy costs may thwart that projection ([08:48]).

---

7. Political Promises Under Threat

• Rachel Reeves’s Statement:
  • Lucy notes:
    “Rachel Reeves, the Chancellor, last week saying that people would be £1,000 per year better off. That now sadly feels like wishful thinking, doesn’t it?” ([08:48])
• Rupert’s Response:
  • “It’s impossible to see in the current climate how ... oil and energy just feeds into so many aspects of our life ... you’ve got a bit of a perfect storm.” ([08:58])

---

Notable Quotes & Memorable Moments

• On inevitability of price rises:
  • “If you’re putting money on it, I think you’d have to be saying ... energy bills, that’s going up.”
    — Rupert Jones ([02:19])
• On everyday impact:
  • “Petrol and diesel is one of those ones ... that’s the one that starts hitting people first, really.”
    — Rupert Jones ([03:41])
• On political optimism:
  • “That now sadly feels like wishful thinking, doesn’t it?”
    — Lucy Hoff on Reeves’s inflation promise ([08:48])
• On widespread consequences:
  • “Oil and energy just feeds into so many aspects of our life ... you’ve got a bit of a perfect storm.”
    — Rupert Jones ([08:58])

---

Timestamps of Important Segments

• 00:49–01:55 – Initial remarks on multifaceted impact: petrol, diesel, mortgages, energy bills
• 02:00–03:23 – Discussion of the energy price cap and likely summer increases
• 03:23–04:50 – Petrol/diesel price spikes and how consumers are experiencing the rise
• 04:50–05:46 – The impact of the Strait of Hormuz blockade and practical savings advice
• 05:46–07:59 – Mortgage market upheaval: rising rates, pulled products, advice for homeowners
• 08:10–08:48 – Broader inflation: effects reaching supermarkets and the cost of groceries
• 08:48–08:58 – Government promises versus economic reality
• 09:11–09:12 – Episode close and acknowledgements

---

Summary

In under ten minutes, this episode distills the immediate and potential medium-term fallout of the Iran war on UK households. Listeners are warned to brace for higher energy and fuel costs, mortgage turmoil, and a likely stall in inflation relief, all layered atop existing uncertainty. Rupert Jones provides both sobering analysis and practical steps for those impacted: compare fuel prices, book mortgage deals in advance, and be aware that hoped-for government relief may be short-lived in the face of interconnected global shocks.

For more on personal finance developments, follow Rupert Jones and the Guardian Money team at theguardian.com.

---

Transcript

[Lucy Hoff]

This is the Guardian.

[Adam Grant]

Hey, this is Adam Grant, host of ted's podcast Rethinking with Adam Grant. Let me share with you why smart finance leaders turn to Bill. They know that clarity isn't just helpful, it's strategic. As the intelligent finance platform, Bill uses AI to automate the busy work for nearly half a million businesses so they can focus on intentional growth, eliminate the friction and start scaling with the proven choice. Visit bill.compenven to talk with an expert about automating your business finances and get a $250 gift card as a thank you. That's bill.com proven terms and conditions apply. See offer page for details.

[Rupert Jones]

This feels like it's kicking off on so many different fronts in terms of the things that we all spend our money on on the petrol and the diesel front, certainly already gone up. The mortg is sort of internal energy bills. I think if you, if you're putting money on it, I think you'd have to be saying that's going up.

[Lucy Hoff]

The war in Iran has sent shockwaves through the global economy and could threaten a new cost of living crisis in the uk. From the Guardians Today in focus, this is the latest. With me, Lucy Hoff. I'm joined by Rupert Jones, who is deputy editor of the Guardian's Money section. Thanks so much for coming into the studio, Rupert. So, I mean, people might recall or is in certainly recent memory the economic shockwaves that were sent out across global markets and for consumers in the wake of the Russian full scale invasion of Ukraine. One thing that's become clear in the week and a half or so since the war broke out in Iran is that similar levels of economic shock are spreading in a way that consumers are already starting to feel the pinch. And there are warnings that this could start to send energy bills here and elsewhere up.

[Rupert Jones]

Yes, that's right. You're right. It's, I mean, with this thing, it's just, it feels like it's kicking off on so many different fronts of, in terms of the things that we will spend our money on, the things that we build on. And some things seem to be sort of, there's maybe not that much movement right now. Other things are moving right now. I mean, so household energy bills is one of those ones where there's a little bit of security in that. There's this off gem price cap, obviously that probably most people know about now that sort of, you know, that caps off the maximum of what you pay. They've set it for the period 1st of April to the end of June. So we've got. That's nailed down, if you like.

[Lucy Hoff]

It's not far away.

[Rupert Jones]

It's not. It's not that far away. Of course, the worry is. I mean, yes, there's been lots of sort of people, there's. Various analysts have been. Have already. I mean, even before things really started kicking off, people have been sort of saying that they maybe think that the price cap could have to increase perhaps 10% for the next period, which would be July to September. So, as I say, there's a little bit of security at least there for the next, you know, next few weeks or so for people. And I guess if you were trying to find some sort of. What's the word? Some positives, some silver linings in a. What is a really black cloud. The summer, I guess, is not the worst time. If the price cap goes up, we do use less energy, you know, I guess we need to sort of all hope for a sort of a hot summer. And there will be people with things like solar panels. They can now, that will sort of help. So. But yes, energy bills, I think if you. If you're putting money on it, I think you'd have to be saying that's. That's going up.

[Lucy Hoff]

But really, people facing months of uncertainty about where the prices will increase as we approach the colder months. One thing that has been more clear, more stark park for people is the cost of petrol. If they're filling up their cars in the last few days, that has already increased in a way that people are already really feeling.

[Rupert Jones]

Yeah, it isn't absolutely. I said petrol and diesel is one of those ones. It's always the first thing that you sort of see going off on the sort of the. Whatever the panel with the sort of the red lights flashing. It's always the one that. That's the one that starts hitting people first, really. So, yes, in terms of sort of unleaded, when I looked just now. So unleaded petrol is sort of nudging 140p a l on average. I think it was roughly about 132p a litre just before this all sort of kicked off. Diesels now roughly at about 155 per litre on average. That was at around 1:42. You could say that's not terrible. But we, of course, we don't know how long this whole thing is going to be going on for. I mean, there were warnings that if oil stayed above this sort of crucial $100 a barrel figure that everyone always talks about, that petrol could rise towards 150 a litre. And that diesel might even start creeping towards 180p now. I mean, small bit of good news right now is that the oil, when I looked oil is sitting at roughly more like about $90 a barrel. But yeah, they've certainly already gone up, basically.

[Lucy Hoff]

Yeah. And as we were discussing on yesterday's podcast, Donald Trump has also been spooked by the turmoil in global markets. So he was trying to say, yes, the war will be over pretty soon, but nonetheless there is still action. There is a major blockade of the Strait of Hormuz, which is this vital narrow passage in the Persian Gulf through which one fifth of the world's oil travels. That chokehold is, is causing this impact, isn't it? Given the way that oil underpins so much of the global economy?

[Rupert Jones]

It is. And I mean, obviously, I mean, in terms of the, on the petrol and the diesel front, I mean, prices have always varied hugely around the forecourts, you know, and there are, there are lots of apps now and websites that people can and do use. You've got the petrol prices. So I think this is the time, you know, people need to be sort of really checking. You know, maybe in the past they wouldn't have bothered checking those things because they felt that it was sort of fairly small beer amounts, but now you've really got to be sort of checking those things out, really.

[Lucy Hoff]

One thing that's coming up in the, in the short term is the bank of England's decision on interest rates. There had been indications that the bank of England was expected to cut interest rates. We've just come off the back of two cuts, which meant people applying for mortgages were seeing cheaper rates than they may have seen since 2022, during the time of Liz Truss's mini budget. But already there's huge disruption to the mortgage market as well, isn't there? Hundreds of mortgage products being pulled from the market and interest rates already increasing for people who might be applying.

[Rupert Jones]

Yeah, you're right. So the more the mortgage market is sort of internal, like so many other sectors at the moment, obviously all this stuff about inflation and the interest rate projections, all of this stuff sort of feeds into the, if you like, the computations for how you price mortgages and the money markets and all of that sort of stuff. So, yeah, in fact today there has been sort of some quite sort of notable developments. So the average rate on a two year fix has now gone above 5% for the first time since August. So that's quite a notable thing. Yeah, we've actually had nearly 500 mortgage deals that were just basically pulled from the shelves in the last 48 hours. That isn't as bad as it was when we had the sort of. The fallout after the famous notorious mini budget of 2022. Then we had nearly 1,000 deals pulled within BAS one day. But yes, things are, yeah, basically deals are being. Deals are basically being withdrawn and I mean, literally people are sort of reaching out to grab that deal and it's being sort of withdraw taken off the shelf, being repriced. You've got lenders like hsbc, they've already announced, I think within about the last week or so, they've announced two lots of repricings. So, yeah, I mean, book a deal if your time is coming up, because this is, I mean, this year unfortunately is a big year for sort of people getting new deals. We've got about, I think it's 1.8 million people. Their fixed rate mortgage is basically ending this year and probably the vast majority of them are going to have to get a new deal. So. But you can book a deal, you can book something in advance. So there are ways of doing. You can sort of book a deal in advance, put your sort of marker down on that and then sort of slightly see what sort of happens over the coming weeks.

[Lucy Hoff]

But at the same time, are people then also going to be going to supermarkets? Is the price of everyday living. I mean, you mentioned inflationary pressures that impacts not just borrowing or saving money.

[Rupert Jones]

Right.

[Lucy Hoff]

But everyday cost too.

[Rupert Jones]

Yeah, absolutely. So, I mean, in terms of the sort of, if you like, the big consumer price inflation figure that we talk about a lot of, which is, you know, groceries and food and things like that. So we've just had a warning that the main inflation that consume UK consumers see that that could end the year higher than previously expected at roughly 3% because of the war, which is all rather unfortunate. I mean, headline inflation is currently. Right. Well, according to the most recent data Is at about 3%. But the government and everyone had been hoping, well, more than hoping, expecting that it would drop to close to 2% this year.

[Lucy Hoff]

And Rachel Reeves, the Chancellor, last week saying that people would be £1,000 per year better off. That now sadly feels like wishful thinking, doesn't it?

[Rupert Jones]

It's impossible to see in the current climate how. I mean, the trouble is with the. I guess oil and energy just feeds into so many aspects of our life. I mean, it just affects really. And of course you've got a bit of a perfect storm. Yeah.

[Lucy Hoff]

Rupert, thank you so much for your time.

[Rupert Jones]

Thank you. For having me.

[Lucy Hoff]

That's it for today. My huge thanks again to Rupert Jones, deputy editor of the Guardian's Money section. You can keep up with his work and that of his team [e-mail] and if you're looking for something else to listen to, I'd really recommend today's episode of the Guardian's Audio Long Read, which is from the archives and tells the story of one woman's childhood spent between Essex and Iran. Thanks for listening to this episode of the Latest the new evening edition of Today in Focus. Today in FOCUS will be back in your feeds as usual tomorrow morning. The latest will be back tomorrow night. This episode was presented by me, Lucy Hoff. It was produced by Annie Lavespa. Senior producer was Ryan Ramgobin and the lead producer was Zoe Hitch. This is the Guardian.

[Rupert Jones]

Foreign.

[Adam Grant]

Hey, this is Adam Grant, host of Ted's podcast Rethinking with Adam Grant. Let me share with you why smart finance leaders turn to Bill. They know that clarity isn't just helpful, it's strategic. As the intelligent finance platform, Bill uses AI to automate the busy work for nearly half a million businesses so they can focus on intentional growth, eliminate the friction and start scaling with the proven choice. Visit bill.compenven to talk with an expert about automating your business finances and get a $250 gift card as thank you. That's bill. Com. Proven terms and conditions apply. See Offer page for details.